Billionaire Stephen Mandel’s Long Term Stock Picks Include QUALCOMM, Inc. (QCOM)

Dollar General Corp. (NYSE:DG) has been another of the fund’s long term picks, with Lone Pine owning over 13 million shares at the end of the fourth quarter of 2012. Dollar stores in general are trading at a small premium to big-box discount retailers such as Target (NYSE:TGT) and Wal-Mart (NYSE:WMT) with even lower betas. Dollar General Corp. (NYSE:DG) is no exception, with a beta of 0.1 (making it an interesting defensive stock) and trading at 18 times trailing earnings. Brookside Capital, which is Bain Capital’s long/short hedge fund, was buying between October and December and closed 2012 with a total of 5.3 million shares (check out more stocks Brookside was buying).

Lone Pine most recently disclosed ownership of 2.8 million shares of Equinix Inc (NASDAQ:EQIX), an $11 billion market cap data center services company. 19% of the float is held short as a number of market players are bearish. Current market expectations are for very high earnings growth- the forward P/E multiple is 47- but the numbers from the first quarter of 2013 show “only” 10% revenue growth versus a year earlier which is lower than we’d expect to see at that pricing. Paulson & Co., billionaire John Paulson’s hedge fund, had 2.1 million shares in its portfolio at the beginning of January (see Paulson’s stock picks).

The fund slightly trimmed its stake in QUALCOMM, Inc. (NASDAQ:QCOM), by 5%, leaving Mandel with 6.5 million shares per the filing. Net income declined in its most recent quarter compared to a year ago, but this was entirely due to income from discontinued operations in that period- income from continuing operations rose by 30%, essentially in line with sales figures. With earnings multiples in the teens, QUALCOMM, Inc. (NASDAQ:QCOM) could offer “growth at a reasonable price.” QUALCOMM, Inc. (NASDAQ:QCOM) had made our list of the most popular tech stocks among hedge funds in the fourth quarter of 2012 (find more tech stocks hedge funds love).

Disclosure: I own no shares of any stocks mentioned in this article.